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USD/ILS Analysis: Fresh Speculative Lows and Dynamic Bearish Trend

By Robert Petrucci

Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services....

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As of this morning’s trading the USD/ILS is flirting near the 3.30000 vicinity, this after challenging the 3.29300 yesterday and coming within sight of long-term lows again today.

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The USD/ILS is being driving lower and its bearish trend is getting the attention of speculative forces. The USD/ILS as of this writing is near the 1.30500 ratio depending on bids and asks. The currency pair has attained a strong bearish mode which continues to make perceived support levels look vulnerable.

Yesterday and early this morning the USD/ILS went below the 3.30000 mark. Current values in the USD/ILS are bouncing up against prices not seen since the summer of 2022. Yes, the USD has taken on a weaker tone across Forex, but the lower momentum in the USD/ILS suggest risk premium built into the Israeli Shekel is now being discounted as financial institutions embrace optimism and is combining with USD centric weakness and created what has been a dynamic move down. The USD/ILS has traded below the 3.30000 before, from December 2020 until May 2020 the currency pair frequently traded between 3.10000 and 3.30000 with outliers occasionally.

Bank of Israel Higher Interest Rate

For the moment the Bank of Israel is maintaining it rather elevated interest rate of 4.50% which matches the U.S Federal Reserve. Inflation remains sticky in Israel, particularly in food products for consumers. However, at some juncture the Bank of Israel may be forced to lower its interest rate in order to alleviate what may become an Israeli Shekel that is too strong.

The momentum lower in the USD/ILS has been demonstrated for a while and its ability to not only drop to long-term lows, but now trade substantially below levels seen in 2023 are rather impressive. Speculators who have been consistently selling the USD/ILS may start to ask how much lower the currency pair can traverse before support levels start to emerge.

3.30000 and New Inflection Ratios

In the past couple of weeks not only has the 3.40000 level proven vulnerable, but the 3.36000 level now appears to be rather durable as resistance. If the USD/ILS continue to trade below 3.36000 and in fact sticks to the 3.30000 as a target, financial institutions may believe the 3.25000 level is once again a possible mark.

  • The USD/ILS traded within the 3.20000 to 3.25000 only a handful of years ago and this may be seen as a realistic place for the currency pair to find an equilibrium again.
  • The Middle East conflict remains a constant talking point, but as a threat financial institutions are proving they are comfortable with their outlooks.
  • Looking for slightly lower momentum in the USD/ILS may remain the favored wager by speculators.
  • Until the downwards trend of the currency pair shows that it is running into stubborn support, the USD/ILS could incrementally pursue lower values.

USD/ILS Short Term Outlook:

Current Resistance: 3.32100

Current Support: 3.30300

High Target: 3.35000

Low Target: 3.29200

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Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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